China's toy industry facing challenge as EU tightens rules

14:03, July 22, 2011

Toy designers work in an office at a toy factory in Yiwu, east China's Zhejiang Province, July 18, 2011. (Xinhua/Tan Jin)

Stricter safety requirements for toys came into force in the European Union (EU) market on Wednesday, posing a challenge to China's toy manufacturing industry.

The New European Union Toy Safety Directive, adopted two years ago, tightens the rules of toys sold with food to prevent toys from being swallowed by a small child.

It also requires that toys should carry details of the manufacturer or importer on the packaging and possibly on the toy itself, making it easier for customers and authorities to trace the origin of toys.

But what batters Chinese toy makers under the new rules is the tighter control over the chemicals that can be used in toys.

The EU-wide regulation contains a ban of CMR (carcinogenic, mutagenic and reprotoxic) substances, not only limiting the use of allergenic fragrances in toys but raising the number of restricted harmful chemicals from eight to 19.

The new standards will take effect in July 2013 as a second phase.

The new rules on toy safety, market experts say, will increase costs of Chinese toy makers by at least five percent, squeezing their already paper-thin profits.

China, the world's largest toy maker, takes up about 70 percent of the global market share and accounts for about 80 percent of Europe's imports of toys.

In Yiwu, one of China's major toy manufacturing bases, more than 3,200 firms stay in toy-related businesses, most of which are small and medium-sized enterprises. To meet the new EU requirements, these companies will face additional costs by buying testing equipment or paying a lab to do the tests for the chemical contents of toys.

It is widely believed that Chinese toy makers can only survive the storm of cost rise, coupled by the appreciation of the Chinese currency, by adapting to the new quality requirements and increasing R&D investment to make toys with higher added value.